Business Directories

Kuwait credit growth up 5.2pc

Kuwait, January 15, 2013

The credit growth in Kuwait has bounced back following a large drop in October, thus registering a solid 5.2 per cent growth taking the year-to-date (ytd) total to KD1.3 billion ($4.61 billion), said a report.

The credit saw a noticeable increase in November following a large drop in October with the year-end credit growth seen near 5.5 per cent, said the top Kuwaiti lender National Bank of Kuwait (NBK) in its review.

This further bolsters credit growth in 2012, which has generally been stronger than the previous year. Growth has been largely driven by personal facilities while corporate credit has remained relatively subdued, the report added.

According to NBK, the credit to the nonbank financial sector continued to weigh down on total credit. The outstanding credit to residents rose by KD188 million in November following a large drop last month.

Personal facilities (excluding securities) increased by KD117 million in November, mostly in installment loans, once again driving overall credit growth. This sector has added KD963 million to outstanding loans ytd and was up 16.5 per cent year-on-year (y/y).

Mild drops in the trade and industry sectors coupled with healthy increases in construction and real estate helped reverse last month’s uncharacteristic decline in credit, said the Kuwaiti lender.

Lending to non-bank financials, however, remains a drag on overall credit growth declining by KD 52 million on the month and by 16.7 per cent ytd, it added.

An increase in sight and time deposits caused both the narrow (M1) and broad (M2) measures of money supply to expand by KD233 million and KD 150 million, respectively. M1 and M2 are up 17.1 per cent and 5 per cent y/y respectively, said the NBK in its report.

The private deposits surged to KD104 million in November. A strong increase in KD deposits, propelled by a sizeable gain in sight deposits, was behind the increase in private resident deposits.

However, the country's foreign currency deposits dropped by KD80 million, the report added.-TradeArabia News Service